Go First’s bankruptcy: Engine lessors left waiting as tribunal defers hearing to July

NCLT indicated it needed more time to study the Delhi High Court’s order in a related case involving the airline and determine an appropriate ruling under the Corporate Insolvency Resolution Process (CIRP), in line with the court’s judgment.

The High Court had in April ordered the Directorate General of Civil Aviation to deregister all 54 aircraft leased by Go First, effectively quashing any hopes of a revival for the 20-year-old low-cost carrier. 

The court asked the aviation regulator to process the aircraft lessors’ deregistration applications as well as to assist them in accessing airports for flying back their aircraft. Subsequently, the DGCA deregistered all the 54 aircraft in early May.

Engine lessors stranded

Engine lessors of the bankrupt airline urged NCLT to issue an urgent order as their engines are connected to the deregistered aircraft. As per the engine lessors, certain aircraft have engines leased to them. If these aircraft are required to leave the country after deregistration, the engines must also undergo deregistration. 

Only aircraft lessors of Go First had approached the Delhi High Court for the deregistration of their aircraft, not the engine lessors of the airline.

Also read | The Go First case: India’s insolvency court needs an understanding of aviation

The engine lessors stated that Go First’s resolution professional had no jurisdiction left with their assets as the DGCA had deregistered all the 54 aircraft as directed by the Delhi High Court, and as the RP has not challenged the single-bench order.

During the NCLT hearing, the RP declined to provide clarity on the future steps following the Delhi High Court’s ruling that left the airline with no aircrafts.

As of now, Go First has not contested the High Court’s order.

Faulty engines

Previously, on 8 April, NCLT had granted Go First a 60-day extension to conclude its corporate insolvency resolution process, taking stakeholders’ interests into account. This extension is valid until 3 June.

Go First, established in 2005 and formerly supported by the Wadia Group, filed for insolvency on 2 May, 2023, and ceased operations the following day, attributing its financial troubles to faulty engines supplied by American aerospace manufacturer Pratt & Whitney.

The airline’s total liabilities to creditors amount to about ₹11,463 crore, including dues to banks, financial institutions, vendors, and aircraft lessors.

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Published: 13 May 2024, 03:50 PM IST